The new budget request looks to add $45 billion to discretionary and mandatory funding for student assistance such as loans, grants and work-study. This increase brings the available funds for student assistance to $142.8 billion and looks to help over 12 million students pay for college.

Included in the new education budget are key proposals like expanding the PAYE (Pay As You Earn) program where students with modest incomes are protected from unmanageable debt by lowering monthly payments. The PAYE program would be eligible to more students if the budget passes. Other proposals include a College Graduation Bonus that would reward colleges for successfully enrolling and graduating low-income students, and increasing Pell Grants to $5,830, and making them available to students without a high school diploma or in adult education.

In addition to increasing aid, the Fiscal Year 2015 Budget also seeks to strengthen existing higher education programs like the Federal TRIO Programs that supports low and modest-income college students, and the International Education and Foreign Language Studies programs by requesting $2.3 billion.

The Obama Administration plans to offset the raised spending in education by increasing taxes by way of a “Fair Share” tax, a tax on the wealthy that is projected to generate $53 billion over a decade, reported Bloomberg. The budget also includes a tax on gas and tobacco.

Of course, President Obama’s budget has only recently been filed to Congress. Whether everything on the administration’s wishlist will be checked off is still up in the air.

For the full announcement along with a quick Q&A session, check out the video below.

One Comment

Broke0LMar 06, 2014 @ 00:06:33

Maybe this is good news for people with undergrad debt, but it’s a death sentence for a law student. NYU costs 70k a year minimum COA. The new budget sets the public service forgiveness limit at 57k (it didn’t have a limit before). This new plan essentially means the only people who can afford to be public defenders or nonprofit attorneys are people who are rich or on full scholarships.